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Nano, Railways to drive stainless steel demand

Dilip Kumar Jha  |  Mumbai 

Driven by a revival in demand from the auto and railway sectors, the country’s per capita stainless steel consumption is likely to double in two-three years.

“Innovative uses in existing and finding new applications, especially in kitchen, railways, buses, malls and multiplexes, furniture among others will drive the steel demand significantly because of its corrosion-resistance property,” said N C Mathur, president of Indian Stainless Steel Development Association (ISSDA).

The association estimates per capita consumption to rise to over 2 kg in 2-3 years as against 1.2 kg at present.

Citing the example of the recently launched Nano, Mathur said that each small car used at least 5 kg of stainless steel. Nano too was expected to drive the stainless steel demand to some extent, he added.

Recently, the Bureau of Indian Standard (BIS), the government's standardisation agency, has approved the use of stainless steel in LPG cylinders. According to reports, Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) have invited bids from stainless steel producers for manufacturing cylinders.

The Indian Railways is setting up two coach factories, one each in Kerala and Uttar Pradesh, which are expected to manufacture 15,000 stainless steel wagons. The Railways will require 7-8 tonnes of stainless steel for each wagon, depending on the capacity. Additionally, the Railways has also proposed to replace carbon steel with stainless steel on existing superfast trains. Metro Rail is a growing sector, which will continue to create higher demand in future as well.

“All these put together, the consumption of stainless steel may increase phenomenally in the next two years for which the industry will have to work hard and find new metal uses," Mathur added.

India's total consumption is estimated at about 1.3 million tonnes against the production of 1.7 million tonnes. The country also imports flats and longs stainless steel products to the tune of 2-3 lakh tonnes and exports about 400,000 tonnes every year.

Kitchen and related products use about 70 per cent of the corrosion-free metal in India while malls, multiplexes, airports among others consume about 2 per cent. Automotive sector and Railways still consist of about 2 per cent while the remaining is shared by miscellaneous sectors including furniture.

When quizzed about the metal's advantage because of falling nickel prices, Mathur said, “Certainly, the steep fall in nickel prices from the level of $53,000 to the present $10,600 per tonne has benefited stainless steel producers a lot." But, we want to change the product mix by utilising more chromium, available in India, than nickel, not produced locally." This will reduce the industry's reliance on nickel market which is very volatile, a ferrous metal analyst said.

Recently, a new category "Chrome 16" was introduced in the market which is nickel-free with 16 per cent use of chromium.

Although, this is a bit magnetic, but will be happily accepted in the Indian kitchen, Mathur said.

A normal stainless steel 300 series (for industrial applications) uses 8 per cent nickel while 200 series (for utensil manufacturing) consumes about 1 per cent of nickel thereby, reducing industry's reliance on uncertain nickel market.

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First Published: Fri, April 10 2009. 00:44 IST